0 Data Table - X (Cttek on the icon located on the topright comer of the data tahte below in order to copy its contents into a spreadsheet.) Debt

Seeking help with A below. The table is also attached for the problem. Thank you.

Your firm is considering issuing​ one-year debt, and has come up with the following estimates of the value of the interest tax shield and the probability of distress for different levels of​ debt:. Suppose the firm has a beta of​ zero, so that the appropriate discount rate for financial distress costs is the​ risk-free rate of 5 %

5%. Which level of debt above is optimal​ if, in the event of​ distress, the firm will have distress costs equal to

a. 2